Dollar higher vs yen in Asian trading ahead of Bank of Japan meeting

The dollar rose against the yen in Asia trading Monday ahead of the Bank of Japan's two-day policy meeting.

Photo: Dollar higher vs yen in Asian trading ahead of Bank of Japan meeting

The U.S. dollar was trading at 119.46 yen midafternoon Monday, up from 119.33 yen late Friday in New York. The euro rose to US$1.3152 from US$1.3134.

Japanese investors also bought the euro on the wide interest rate gap between Japan and the euro zone, while many overseas fund players shied away from active trading before the Bank of Japan's meeting starts Tuesday.

Despite the possibility that the BOJ may raise interest rates from the current 0.25 percent, the euro remains attractive enough, saying that a still-wide interest rate gap will remain even if the central bank moves.

"Even if Japan's central bank decides to tighten credit this week, its interest rate levels are still fairly low compared with Europe's," said Satoru Ogasawara, an economist at Credit Suisse.

In the Asian session Monday, the euro rose to an intraday high of 157.24 yen from its closing level in New York Friday of 156.75 yen.

The euro rose against the dollar on expectations that the U.S. Federal Reserve won't raise rates in the near future, reports AP.

"Hopes for a rate hike in the U.S. have sharply faded following the slightly dovish remarks by Fed Chairman Ben Bernanke last week and tame economic indicators released Friday such as housing starts," said Tsutomu Soma, senior trader at Okasan Securities.

The dollar was mostly higher against other Asian currencies. It rose 0.43 percent against Indian rupee to 44.065, and also 0.43 percent against Philippine peso to 48.090